Prime US REIT - Phillip Securities 2023-02-17: Strong Rental Reversions To Drive Growth

Prime US REIT - Strong Rental Reversions To Drive Growth

  • Prime US REIT (SGX:OXMU)'s FY22 DPU of US$0.0655 was slightly below our estimates, mainly due to higher interest expense (+27.2%) and lower occupancies (89.1%).
  • Despite portfolio valuation declining 6.7% on higher discount and cap rate assumptions, gearing at 42.1% and interest coverage at 4.1x remains well within regulatory limits.
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  • Prime US REIT is our top pick in the US office sector for greater tenant exposure to STEM/TAMI sectors.

The Positives

Strong positive rental reversions of 20.2% for 4Q22,

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  • Occupancy remained relatively stable, declining 0.5% q-o-q to 89.1%. Leasing remains active, with activity coming from sectors such as scientific R&D services, finance, biotechnology, manufacturing and legal services.
  • The 20.2% reversion was substantially from Crosspoint, where an existing tenant downsized from 84k sq ft to 57.5k sq ft and extended the lease to 2032, and a new tenant backfilled space and signed a lease till 2034 at >25% reversions.

82% of debt is on fixed rate or hedged,

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Above is the excerpt from report by Phillip Securities Research.
Clients of Phillip Capital may be the first to access the full report in PDF @

Darren Chan Phillip Securities Research | 2023-02-17

Read also Phillip's most recent report:
2024-05-13 Prime US REIT - Pricing In Some Refinancing Risk.

Previous report by Phillip:
2024-02-26 Prime US REIT - No Breach, But Refinancing Risks Persist.

Price targets by other brokers at Prime US REIT Target Prices.

Listing of research reports at Prime US REIT Analyst Reports.

Relevant links:
Prime US REIT Share Price History,
Prime US REIT Announcements,
Prime US REIT Dividends & Corporate Actions,
Prime US REIT News Articles


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